In the United States, ordinary workers bear some of the highest tax burdens in the world. Meanwhile, billionaires like Elon Musk, Jeff Bezos, and Mark Zuckerberg have perfected strategies to grow their wealth while paying comparatively little—or sometimes almost nothing—in personal income taxes. One of the most famous tactics among tech moguls is the so-called “Buy-Borrow-Die” approach, combined with accepting a symbolic salary of $1 or even $0, holding assets “on paper,” and leveraging loans against their shares to fund an extravagant lifestyle.

Take Elon Musk, for example. In 2024, he officially took a salary of $0 from Tesla, yet his net worth increased dramatically. How is that possible? The key lies in the structure of the U.S. tax system. Ordinary income from wages is taxed heavily, often exceeding 50% when combining federal income tax, payroll taxes, and state taxes. An average worker earning $60,000 a year might pay more than $13,000 in income and payroll taxes alone. High earners making $400,000 per year pay roughly 30% in taxes.

But Musk doesn’t rely on a salary. Instead, his wealth comes primarily from the equity he owns in Tesla, SpaceX, and other ventures. By not receiving a traditional wage, he avoids generating taxable income in the conventional sense. His wealth grows as the stock prices of his companies increase, a form of “paper wealth” that isn’t taxed until it is realized through a sale. In 2024, Musk’s net worth reportedly surged by over $200 billion, all without triggering substantial personal income tax obligations.

This is not unique to Musk. Jeff Bezos officially took a salary of $81,840 per year in 2024—low enough to qualify for tax advantages for heirs—and Warren Buffett has historically limited his salary to around $100,000, supplemented by stock options. Meanwhile, the value of their holdings grows exponentially. Bezos gained $80 billion in net worth in 2024, Zuckerberg added $113 billion, and Musk added $213 billion, all largely untaxed under current U.S. law.

The crucial loophole lies in the treatment of unrealized gains. U.S. tax law does not consider increases in asset value as taxable income unless the asset is sold. So, when Tesla shares rise or SpaceX valuations climb, Musk’s wealth grows enormously without a penny of income tax due. Essentially, the IRS does not tax paper profits, creating a form of “invisible income” with immense compounding power.

Of course, billionaires still need liquid funds for personal expenses—private jets, luxury homes, or ambitious projects like acquiring Twitter-X or funding SpaceX launches. This is where the “Buy-Borrow-Die” strategy comes into play. Instead of selling shares (which would trigger capital gains taxes up to 20%), Musk and others use their stocks as collateral to borrow money from banks. These loans are not considered taxable income, allowing them to fund purchases or investments while retaining full ownership of their stock.

For instance, Musk famously leveraged Tesla shares to finance his $44 billion purchase of Twitter-X. Larry Ellison of Oracle has similarly leveraged assets for high-profile acquisitions. The interest rates on these loans are typically low relative to the growth of the stock used as collateral, creating a self-perpetuating cycle: borrow against appreciating assets, spend the loan proceeds, and refinance or roll over debt as necessary. Meanwhile, the underlying stock continues to compound in value untaxed.

This system allows billionaires like Musk to access near-unlimited liquidity while keeping their net worth largely intact—and mostly untaxed. They can live opulently, invest in new ventures, and fund ambitious projects without generating taxable income. And when the time comes to pass wealth to the next generation, further tax strategies come into play.

Despite the theoretical U.S. estate tax of 40% on assets above $15 million, the actual amount collected is tiny compared to the total wealth being transferred. Billionaires use complex trusts, family foundations, and other legal mechanisms to pass on tens of billions of dollars to their heirs with minimal tax liability. In 2024, the U.S. collected roughly $30 billion in estate taxes, a mere fraction of the $50 trillion held by the top 1% of Americans.

Elon Musk is a prime example of how these rules create enormous advantages for the ultra-rich. His paper wealth, largely tied to Tesla, SpaceX, Neuralink, and other holdings, grows continuously. Even if he doesn’t sell shares, borrow against them, or take a salary, he remains among the wealthiest people on Earth. The same rules apply to other tech billionaires, creating a stark contrast with everyday workers, who bear the brunt of income and payroll taxes.

This gap illustrates a fundamental flaw in the system: wealth accumulation is decoupled from taxable income. Ordinary workers and even highly paid employees like doctors, lawyers, and corporate executives contribute heavily to federal and state revenues, while billionaires like Musk continue to amass fortunes almost tax-free. According to Professor Ray Madoff of Boston University, this creates a new kind of American aristocracy—a class of individuals with extraordinary wealth who, by design, contribute far less proportionally to public revenue than their employees.

The social consequences are profound. The ultra-rich benefit the most from the infrastructure, security, and stability that society provides but often pay the least in proportion to their growing fortunes. Ordinary taxpayers carry the heavier load, sustaining public institutions, roads, and government services. The system perpetuates inequality, allowing billionaires to consolidate wealth across generations while ordinary families work within heavily taxed wage frameworks.

In the case of Elon Musk, this approach has funded not only a luxurious lifestyle but also revolutionary companies reshaping transportation, energy, and space exploration. Musk’s strategy—zero salary, leveraged assets, and deferred taxation on unrealized gains—demonstrates how legal and financial tools can be used to maximize wealth without the burdens ordinary taxpayers face. It also highlights the extraordinary gap between the richest and the rest of society.

Without systemic reform to close loopholes and align taxation with wealth accumulation rather than only income, the gap between billionaires like Musk and ordinary Americans will continue to widen. Musk’s approach is not just a personal strategy—it is a lens into how the U.S. tax code facilitates the growth of wealth for the few while ordinary Americans shoulder the weight of public finance.

In short, Elon Musk exemplifies how ultra-wealthy Americans use the existing financial and legal framework to grow massive fortunes while minimizing tax obligations. From receiving a $0 salary to borrowing against stock and passing wealth through generations with minimal taxation, Musk’s strategies reveal a system where paper wealth and strategic borrowing trump traditional income—and ordinary workers pay the price.